CHANGE-IN-CONTROL SEVERANCE AGREEMENT
                      -------------------------------------

     THIS AGREEMENT entered into and effective this 26th day of February,  2001,
by and  between  Ameriana  Bank & Trust  (the  "Bank")  and  Ralph  Kerwin  (the
"Employee").

     WHEREAS,  the Employee has heretofore been employed by the Bank as a senior
officer pursuant to a written  employment  agreement and the Bank deems it to be
in its best  interest  to enter  into  this  Agreement  as an  incentive  to the
Employee to continue as a senior officer of the Bank; and

     WHEREAS,  it is  intended  that  this  Agreement  shall  replace  any prior
agreement between the parties; and

     WHEREAS,   the  parties   desire  by  this   writing  to  set  forth  their
understanding  as to their  respective  rights  and  obligations  in the event a
change of control  occurs  with  respect to the Bank or  Ameriana  Bancorp  (the
"Company").

     NOW,  THEREFORE,  in  consideration of the mutual covenants and obligations
hereinafter set forth, the undersigned parties AGREE as follows:

     1.   Defined Terms
          -------------

          When  used anywhere in the Agreement,  the following  terms shall have
the meaning set forth herein.

          (a)  "Change in Control"  shall mean any one of the following  events:
(i) the acquisition of ownership,  holding or power to vote more than 25% of the
Bank's or the Company's  voting stock,  (ii) the  acquisition  of the ability to
control the  election of a majority  of the Bank's or the  Company's  directors,
(iii) the acquisition of a controlling influence over the management or policies
of the Bank or the  Company  by any  person  or by  persons  acting as a "group"
(within the meaning of Section 13(d) of the Securities Exchange Act of 1934), or
(iv) during any period of two consecutive  years,  individuals  (the "Continuing
Directors")  who at the  beginning  of  such  period  constitute  the  Board  of
Directors of the Bank or the Company (the "Existing Board") cease for any reason
to constitute at least  two-thirds  thereof,  provided that any individual whose
election  or  nomination  for  election  as a member of the  Existing  Board was
approved by a vote of at least  two-thirds of the  Continuing  Directors then in
office shall be considered a Continuing Director. Notwithstanding the foregoing,
ownership or control of the Bank by the Company  itself  shall not  constitute a
Change  in  Control.   Further,  "Change  in  Control"  shall  not  include  the
acquisition  of  securities  by an  employee  benefit  plan  of the  Bank or the
Company.  For purposes of this paragraph  only,  the term "person"  refers to an
individual or a corporation,  partnership,  trust,  association,  joint venture,
pool, syndicate, sole proprietorship,  unincorporated  organization or any other
form of entity not specifically listed herein.

          (b)  "Code" shall mean the Internal  Revenue Code of 1986,  as amended
from time to time, and as interpreted through applicable rulings and regulations
in effect from time to time.


<PAGE>

          (c)  "Code  Section 280G  Maximum"  shall mean product of 2.99 and his
"base amount" as defined in Code Section 280G(b)(3).

          (d)  "Good Reason" shall mean any of the following  events,  which has
not been consented to in advance by the Employee in writing: (i) the requirement
that  the  Employee  move his  personal  residence,  or  perform  his  principal
executive  functions,  more than thirty (30) miles from his primary office as of
the date of the Change in Control;  (ii) a material  reduction in the Employee's
base  compensation  as in effect on the date of the  Change in Control or as the
same may be  increased  from time to time;  (iii) the failure by the Bank or the
Company to continue to provide  the  Employee  with  compensation  and  benefits
provided for on the date of the Change in Control,  as the same may be increased
from time to time, or with benefits  substantially  similar to those provided to
him  under  any of the  employee  benefit  plans in which  the  Employee  now or
hereafter becomes a participant,  or the taking of any action by the Bank or the
Company  which  would  directly  or  indirectly  reduce any of such  benefits or
deprive the Employee of any material  fringe benefit  enjoyed by him at the time
of the Change in  Control;  (iv) the  assignment  to the  Employee of duties and
responsibilities  materially  different from those normally  associated with his
position;   (v)  a  material   diminution   or  reduction   in  the   Employee's
responsibilities  or  authority   (including   reporting   responsibilities)  in
connection with his employment with the Bank or the Company;  or (vi) a material
reduction in the secretarial or other administrative support of the Employee.

          (e)  "Just Cause" shall mean, in the good faith  determination  of the
Bank's Board of Directors,  the Employee's  personal  dishonesty,  incompetence,
willful  misconduct,   breach  of  fiduciary  duty  involving  personal  profit,
intentional failure to perform stated duties, willful violation of any law, rule
or  regulation  (other than  traffic  violations  or similar  offenses) or final
cease-and-desist  order,  or material breach of any provision of this Agreement.
The Employee shall have no right to receive  compensation  or other benefits for
any period after  termination  for Just Cause. No act, or failure to act, on the
Employee's part shall be considered  "willful" unless he has acted, or failed to
act,  with an absence of good faith and  without a  reasonable  belief  that his
action or failure to act was in the best interest of the Bank and the Company.

          (f)  "Protected  Period" shall mean the period that begins on the date
six months  before a Change in Control and ends on the later of the first annual
anniversary of the Change in Control or the expiration date of this Agreement.

     2.   Trigger Events
          --------------

     The Employee shall be entitled to collect the severance  benefits set forth
in Section 4 of this  Agreement in the event that (i) the  Employee  voluntarily
terminates  employment for any reason within the 30-day period  beginning on the
date of a Change in Control, (ii) the Employee voluntarily terminates employment
within 90 days of an event  that both  occurs  during the  Protected  Period and
constitutes Good Reason, or (iii) the Bank, the Company,  or their  successor(s)
in interest  terminate the Employee's  employment for any reason other than Just
Cause during the Protected Period.

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<PAGE>


     3.   Amount of Severance Benefit
          ---------------------------

          If  the  Employee  becomes  entitled  to  collect  severance  benefits
pursuant  to  Section 3 hereof,  the Bank  shall pay the  Employee  a  severance
benefit  equal to the  difference  between the Code Section 280G Maximum and the
sum of any other "parachute  payments" as defined under Code Section  280G(b)(2)
that the Employee  receives on account of the Change in Control.  Said sum shall
be paid in one lump sum  within  ten (10)  days of the  later of the date of the
Change in Control and the Employee's last day of employment with the Bank or the
Company.

          In the event that the  Employee  and the Bank agree that the  Employee
has collected an amount exceeding the Code Section 280G Maximum, the parties may
jointly  agree in writing  that such excess shall be treated as a loan ab initio
                                                                       -- ------
which the Employee  shall repay to the Bank,  on terms and  conditions  mutually
agreeable to the parties,  together with interest at the applicable federal rate
provided for in Section 7872(f)(2)(B) of the Code.

     4.   Term of the Agreement.  This Agreement  shall remain in effect for the
          ---------------------
period  commencing  on the  Effective  Date and ending on the earlier of (i) the
date 36 months after the Effective Date, and (ii) the date on which the Employee
terminates  employment  with  the  Bank;  provided  that the  Employee's  rights
hereunder  shall continue  following the termination of this employment with the
Bank under any of the circumstances described in Section 3 hereof. Additionally,
on each  annual  anniversary  date  from the  Effective  Date,  the term of this
Agreement  shall be extended for an additional  one-year  period beyond the then
effective expiration date provided the Board of Directors of the Bank determines
in a duly adopted  resolutions  that the performance of the Employee has met the
requirements  and standards of the  respective  Boards,  and that this Agreement
shall be extended.

     5.   Termination or Suspension Under Federal Law.
          -------------------------------------------

          (a) Any payments made to the Employee  pursuant to this Agreement,  or
otherwise,  are subject to and conditioned  upon their compliance with 12 U.S.C.
Section 1828(k) and any regulations promulgated thereunder.

          (b) If the  Employee is removed  and/or  permanently  prohibited  from
participating  in the  conduct of the Bank's  affairs by an order  issued  under
Sections  8(e)(4) or 8(g)(1) of the Federal  Deposit  Insurance Act ("FDIA") (12
U.S.C.  1818(e)(4) or (g)(1)),  all obligations of the Bank under this Agreement
shall terminate, as of the effective date of the order, but the vested rights of
the parties shall not be affected.

          (c) If the Bank is in default (as defined in Section 3(x)(1) of FDIA),
all obligations  under this Agreement shall terminate as of the date of default;
however, this Paragraph shall not affect the vested rights of the parties.

          (d) All obligations  under this Agreement shall  terminate,  except to
the extent that  continuation  of this  Agreement is necessary for the continued
operation of the Bank:  (i) by the Director of the Office of Thrift  Supervision
("Director  of  OTS"),  or his or her  designee,  at the time  that the  Federal
Deposit  Insurance  Corporation  ("FDIC") or the  Resolution  Trust  Corporation
enters into an agreement to provide assistance to or on behalf of the Bank under
the authority contained in Section 13(c) of FDIA; or (ii) by the Director of the
OTS, or his or her designee, at the time that the Director of the OTS, or his or
her


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<PAGE>

designee approves a supervisory  merger to resolve problems related to operation
of the Bank or when the Bank is  determined  by the Director of the OTS to be in
an unsafe or unsound  condition.  Such action shall not affect any vested rights
of the parties.

          (e) If a notice served under Section 8(e)(3) or (g)(1) of the FDIA (12
U.S.C. 1818(e)(3) and (g)(1)) suspends and/or temporarily prohibits the Employee
from participating in the conduct of the Bank's affairs,  the Bank's obligations
under this Agreement  shall be suspended as of the date of such service,  unless
stayed by appropriate  proceedings.  If the charges in the notice are dismissed,
the Bank shall (i) pay the  Employee  all or part of the  compensation  withheld
while its contract  obligations were suspended,  and (ii) reinstate (in whole or
in part) any of its obligations which were suspended.

     6.   Expense Reimbursement.
          ---------------------

          In the event that any dispute arises between the Employee and the Bank
as to the terms or  interpretation  of this  Agreement,  whether  instituted  by
formal legal  proceedings  or otherwise,  including any action that the Employee
takes to enforce  the terms of this  Agreement  or to defend  against any action
taken by the Bank or the Company, the Employee shall be reimbursed for all costs
and expenses,  including reasonable  attorneys' fees, arising from such dispute,
proceedings  or  actions,  provided  that  the  Employee  shall  obtain  a final
judgement in favor of the Employee in a court of  competent  jurisdiction  or in
binding  arbitration  under the rules of the American  Arbitration  Association.
Such reimbursement  shall be paid within ten (10) days of Employee's  furnishing
to the Bank and the Company written  evidence,  which may be in the form,  among
other things, of a cancelled check or receipt, of any costs or expenses incurred
by the Employee.

     7.   Successors and Assigns.
          ----------------------

          (a) This  Agreement  shall inure to the benefit of and be binding upon
any  corporate or other  successor of the Bank or Company  which shall  acquire,
directly or indirectly, by merger, consolidation,  purchase or otherwise, all or
substantially all of the assets or stock of the Bank or Company.

          (b) Since the Bank is contracting  for the unique and personal  skills
of the Employee,  the Employee  shall be precluded  from assigning or delegating
his rights or duties  hereunder  without first  obtaining the written consent of
the Bank.

     8.   Amendments.  No  amendments  or additions to this  Agreement  shall be
          ----------
binding  unless  made in  writing  and signed by all of the  parties,  except as
herein otherwise specifically provided.

     9.   Applicable  Law.  Except to the extent  preempted  by Federal law, the
          ---------------
laws of the State of  Indiana  shall  govern  this  Agreement  in all  respects,
whether as to its validity, construction, capacity, performance or otherwise.


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<PAGE>

     10.  Severability.  The  provisions  of  this  Agreement  shall  be  deemed
          ------------
severable and the  invalidity  or  unenforceability  of any provision  shall not
affect the validity or enforceability of the other provisions hereof.

     11.  Entire Agreement. This Agreement including the recitals, together with
          ----------------
any  understanding  or  modifications  thereof  as agreed to in  writing  by the
parties,  shall constitute the entire  agreement  between the parties hereto and
shall supercede any prior agreement between the parties.


     IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
year first hereinabove written.


ATTEST:                                 AMERIANA BANK & TRUST

/s/ Nancy A. Rogers                     By: /s/ Harry J. Bailey
-------------------------------             ----------------------------
Secretary                                      Its: President




WITNESS:

/s/ Richard E. Welling                      /s/ Ralph E. Kerwin
-------------------------------             ----------------------------
                                               Employee


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